• CTRL Division 1.2.A CTRL Division 1.2.A Key concepts — corporate governance

    • CTRL 1.2.1 CTRL 1.2.1 What is a firm’s governing body?

      For these rules, an authorised firm’s governing body is:

      (a) in the case of a firm that is incorporated as a company or a limited liability partnership in the QFC, or is a partnership constituted under the Partnership Regulations 2007 — its board of directors or the body (whatever it is called) that, under the firm’s constitutional document, has the responsibility of overseeing the firm’s business in or from the QFC; and
      (b) in the case of a firm that is a branch:
      (i) the firm’s board of directors, or a committee of that board, that has the responsibility of overseeing the firm’s business in or from the QFC; or
      (ii) that part of the firm’s committee of management or other body (whatever it is called) that has the responsibility of overseeing the firm’s business in or from the QFC.
      Derived from QFCRA RM/2020-4 (as from 1st July 2021)

      • CTRL 1.2.1 Guidance

        This definition draws a distinction (for some purposes) between:

        • a firm that is incorporated or formed in the QFC; and
        • a firm that is incorporated or formed outside the QFC (that is, a branch).

        In the case of a branch, the firm’s board (wherever it is located) remains ultimately responsible for the oversight of the firm, but many policy decisions may be made by a part, or a delegate, of the firm’s board. These rules recognise that firms choose to allocate their responsibilities and undertake their business in different ways; these rules therefore place the responsibility for certain kinds of oversight on the firm’s board or the part or delegate of the board.

        Derived from QFCRA RM/2020-4 (as from 1st July 2021)

    • CTRL 1.2.2 CTRL 1.2.2 What is a firm’s corporate governance framework?

      (1) An authorised firm’s corporate governance framework is made up of the firm’s organisational structures, policies, procedures and systems and controls as they relate to the firm’s business objectives and the means of achieving them.
      (2) An authorised firm’s corporate governance framework includes:
      (a) the firm’s risk management framework (see rule 1.2.3);
      (b) its internal control and assurance functions (that is, its risk management, compliance oversight, internal audit and actuarial functions);
      (c) its business objectives; and
      (d) the corporate governance obligations in these rules, the Companies Regulations, and other applicable regulations, rules and guidance.

       

      Derived from QFCRA RM/2020-4 (as from 1st July 2021)

      • CTRL 1.2.2 Guidance

        Guidance

        1 The corporate governance framework deals with the relationships between a firm’s board, its senior management, depositors, policyholders, clients and other stakeholders. Other important aspects of corporate governance are the separation of functions within the firm and the accountabilities for the internal control and assurance functions.
        2 The corporate governance framework includes at least the firm’s objectives and the firm’s corporate governance obligations under these rules, the Companies Regulations, and other regulations, rules and guidance.

         

        Derived from QFCRA RM/2020-4 (as from 1st July 2021)

    • CTRL 1.2.3 What is a firm’s risk management framework?

      (1) An authorised firm’s governing body must establish a risk management framework.
      Note For the firm’s risk management framework, see rule 7.1.2.
      (2) The firm’s risk management framework is made up of:
      (a) the firm’s systems for identifying, measuring, evaluating, monitoring, reporting, and controlling or mitigating risks that may affect the firm’s ability to meet its obligations; and
      (b) the structures, policies, processes and people that support those systems.
      Derived from QFCRA RM/2020-4 (as from 1st July 2021)

    • CTRL 1.2.4 What is a firm’s internal controls and assurance framework?

      (1) An authorised firm’s governing body must establish an internal controls and assurance framework made up of the firm’s internal control and assurance functions.
      Note In relation to an authorised firm’s internal controls and assurance framework, see Chapter 6.
      (2) The following controlled functions are the internal control and assurance functions:
      (a) the risk management function (see rule 1.2.12);
      (b) the compliance oversight function (see rule 1.2.13);
      (c) the internal audit function (see rule 1.2.14);
      (d) the actuarial function (see rule 1.2.15).
      (3) The internal controls and assurance framework must provide reasonable assurance on the effectiveness and efficiency of the firm’s operations, the reliability of its financial reporting and the extent of its compliance with applicable laws and regulations.
      Derived from QFCRA RM/2020-4 (as from 1st July 2021)